Monday, November 29, 2010

The United States is working to keep the Israel-Palestine peace talks from breaking down over the issue of disputed settlements. America is offering Israel fighter planes and a UN veto on any sanctions against Israel in exchange for a 90-day suspension of settlement construction. Palestine has said it will not engage in talks if the construction of settlements in the West Bank resumes.

Li Guofu,

- Senior Research Fellow with China Institute of International Studies.

Saturday, November 27, 2010

Note: Robert Grenier was the CIA's chief of station in Islamabad, Pakistan, from 1999 to 2002. He was also the director of the CIA's counter-terrorism centre.

Al Jazeera English

Opinion

The endgame for the peace process

Future historians will argue over the precise moment when the Arab-Israeli peace process died.

Robert Grenier

Last Modified: 21 Nov 2010 11:02 GMT

Future historians will no doubt argue over the precise moment when the Arab-Israeli peace process died, when the last glimmer of hope for a two-state solution was irrevocably extinguished. When all is said and done, and the forensics have been completed, I am sure they will conclude that the last realistic prospect for an agreement expired quite some time before now, even if all the players do not quite realise it yet: anger and denial are always the first stages in the grieving process; acceptance of reality only comes later.

There are growing signs, however, that the realisation is beginning to dawn in Ramallah, Tel Aviv and, most strikingly, Washington, that the peace process, as currently conceived, may finally be dead.

Washington: hoping for a miracle?

We should begin in Washington, in the aftermath of the seven-hour marathon meeting between Hillary Clinton, the US secretary of state, and Binyamin Netanyahu, the Israeli prime minister, in New York last week.

To view the apparent results of that meeting in context, one would have to recount the gargantuan structure of US military, intelligence, economic and diplomatic support to Israel, painstakingly constructed over many decades, for which there would not be space to describe it all here - if indeed one had the knowledge to do so.

The edifice is so extensive, including direct military aid, weapons transfers, access to US emergency weapons stocks, pre-positioning of US military materiel in Israel, US investments in Israeli technology development, US support for Israel's foreign weapons sales, weapons co-production agreements, all sorts of loan guarantees, assistance for settlement of immigrants in Israel - the list goes on - that literally no single entity in Washington is aware of it all.

In September, the US Congressional Research Service made a noteworthy attempt to capture it, but was probably only partly successful, having no access, for example, to classified US assistance. The annual value of all this is literally incalculable, and well in excess of the $3bn per year usually cited, to say nothing of critical US diplomatic support in the UN and elsewhere.

Given all this, confronted with Israel's refusal to extend its partial moratorium on new settlement construction in the Occupied Territories, and with anything more than verbal pressure on Israel literally unthinkable, the US was hard-pressed to come up with additional inducements which might extend the peace process even a little further.

Into the breach, as he has done so many times before, stepped the redoubtable Dennis Ross. Ross, in discussions with an Israeli counterpart, compiled an extensive list of motivators whose length we do not yet know, but which was verbally agreed between Clinton and Netanyahu in New York, and which will be presented in writing for possible approval by the Israeli cabinet.

We are told it includes a US commitment to block any Palestinian-led effort to win unilateral UN recognition of a Palestinian state; US obstruction of efforts either to revive the Goldstone Report at the UN, or to seek formal UN condemnation of Israel for the deadly Mavi Marmara incident; an ongoing US commitment to defeat any UN resolutions aimed at raising Israel's unacknowledged nuclear weapons programme before the International Atomic Energy Agency (IAEA); vigorous US diplomatic efforts to counter all attempts to "delegitimise" Israel in various world fora; and, most importantly, increasing efforts to further ratchet international sanctions on both Iran and Syria concerning their respective nuclear and proliferation efforts.

To this the US is adding a commitment to supply Israel with some 20 ultra-modern F-35 aircraft worth $3bn - so new they have not yet entered the US inventory - as well as a mysterious "comprehensive security agreement," whose details have not been revealed, but which may include unilateral US endorsement of Israeli troop deployments in the Jordan Valley, in the event of an Israeli-Palestinian peace agreement.

And what is Israel being asked in return? Consider this carefully: in return for the above written guarantees, Israel will consider agreement to a brief, one-time-only 90-day extension of the partial settlement moratorium, which excludes not only East Jerusalem, but also the cordon sanitaire of settlements which Israel has carefully constructed to ring the city and deny Palestinian access to it, after which the US agrees, in writing, never again to request an Israeli settlement moratorium.

After witnessing US policy toward Israel and the Palestinians for over 30 years, I had thought I was beyond shock. This development, however, is breathtaking. In effect, along with a whole string of additional commitments, including some potentially far-reaching security guarantees which it is apparently afraid to reveal publicly, the Obama administration is willing to permanently cast aside a policy of some 40 years' duration, under which the US has at least nominally labelled Israeli settlements on occupied territory as "obstacles to peace,". All this in return for a highly conditional settlement pause which will permit Netanyahu to pocket what the US has given him, simply wait three months without making any good-faith effort at compromise, and know in the end that Israel will never again have to suffer the US' annoying complaints about illegal settlements.

Leave aside the fact that as of this writing, the Israeli cabinet may yet reject this agreement - which seems even more breathtaking, until one stops to consider that virtually everything the Americans have offered the Israelis they could easily obtain in due course without the moratorium. No, what is telling here is that the American attempt to win this agreement, lopsided as it is, is an act of sheer desperation.

What gives rise to the desperation, whether it is fear of political embarrassment at a high- profile diplomatic failure or genuine concern for US security interests in the region, I cannot say. It seems crystal clear, however, that the administration sees the next three months as a last chance. Their stated hope is that if they can get the parties to the table for this brief additional period, during which they focus solely on reaching agreement on borders, success in this endeavour will obviate concerns about settlements and give both sides sufficient stake in an outcome that they will not abandon the effort.

No one familiar with the substance of the process believes agreement on borders can be reached in 90 days on the merits; consider additionally that negotiators will be attempting to reach such a pact without reference to Jerusalem, and seeking compromise on territory without recourse to off-setting concessions on other issues, and success becomes virtually impossible to contemplate.

The Obama administration is coming under heavy criticism for having no plan which extends beyond the 90 days, if they can get them. There is no plan for a 91st day because there is unlikely to be one. The Obama policy, absurd as it seems, is to somehow extend the peace process marginally, and hope for a miracle. The demise of that hope carries with it the clear and present danger that residual aspirations for a two-state solution will shortly be extinguished with it.

Tel Aviv: buyer's remorse?

Meanwhile, in Israel, we are seeing something akin to buyer's remorse. On the cusp of finally achieving the goal for which Likud has aimed since its founding in 1973 - that is, an end to the threat of territorial compromise which would truncate the Zionist project in Palestine - the Israeli military and intelligence communities, which will have to deal with the consequences of a permanently failed peace process and the dissolution of responsible Palestinian governance in the West Bank which could well follow, are actively voicing their concerns.

Even as ardent a Likudnik as Dan Meridor has recently said to Haaretz: "I've reached the painful conclusion that keeping all the territory means a binational state that will endanger the Zionist enterprise. If we have to give up the Jewish and democratic character (of the state) - I prefer to give up some of the territory."

The time for such second thoughts has passed, however. Having succeeded in creating irrevocable facts on the ground, settlements which no conceivable Israeli government could remove even if it wanted to, the territory which Meridor and company would conceivably part with now will not be enough to avoid the fate which they fear in future: the progressive delegitimation of the current state, and the eventual rise of a binational state in its place.

Ramallah: terminally gloomy?

The terminal gloom among the tired leadership of the Palestinian Authority (PA) is palpable. They will not allow themselves to be openly complicit in a negotiated capitulation to Israel, and yet they cannot bring themselves to irrevocably abandon the process either.

The recent, relative success of Salam Fayyad, the prime minister, in bringing some measure of security and good governance to the West Bank notwithstanding, they know their legitimacy is tied to the hope of their people for a just peace - a peace they also know, in their hearts, they cannot deliver. They look to the Americans in hope of salvation, while the Americans can only hope, impotently, for the same.

Both Israelis and Palestinians know that the relative calm prevailing in the West Bank and Gaza cannot last indefinitely absent some prospect for an end to Israeli occupation of the former. No one can see the way to a near-term solution, and yet neither does anyone yet have the courage to suggest an alternative future.

That will be the task of a new and probably distant generation of Israelis and Palestinians.

Robert Grenier was the CIA's chief of station in Islamabad, Pakistan, from 1999 to 2002. He was also the director of the CIA's counter-terrorism centre.

Friday, November 26, 2010

The notion that political differences can be solved through job creation is fundamentally flawed and will not change the reality that our economy is micromanaged by a foreign military.

By Sam Bahour

When a project mixes the feel-good concepts of jobs, economic development and Israeli-Palestinian cooperation, how can anyone complain? These are some of the things the international community has been promising to deliver through the construction of industrial free-trade zones in the occupied Palestinian territory. The project's proponents expect the zones to constitute the economic foundation for a future Palestinian state.

These mega-employment projects present a serious challenge to those who are striving to build an independent and viable economic foundation for a future Palestinian state. Because the zones will be dependent on Israeli cooperation to function, and because they will exist within an Israeli-designed economic system that ensures Palestinian dependence on Israel, they cannot form the basis of a sovereign economy. Relying on them will perpetuate the status quo of dependency and risks further entrenching Israel's occupation, albeit possibly under another name, like statehood.

The working assumption is that these zones will be open to any Palestinian or international company wanting to establish a business within them. Although the sectorial theme of each zone, assuming it has already been decided, has not been made public, if existing zones (such as the maquiladoras in Mexico, or those in Jamaica ) are any indication, the zones in Palestine will host "dirty" businesses - those that are pollution-prone and sweatshop-oriented. Jordan's Qualified Industrial Zones provide a regional example. Like many others around the world, they are notorious for their exploitative labor practices.

According to two consultants to the Israeli government, the West Bank zones, several of which are already under construction, are planned to employ 150,000- 200,000 Palestinians, nearly the same number that used to travel daily to Israel for work before the second intifada. Studies from the Peres Center for Peace project even higher numbers, estimating that 500,000 Palestinian workers may be employed in joint industrial zones by 2025. Israeli expectations do not stop there. The consultants also predicted that 30 percent of Palestinian businesses outside the zones will refocus their businesses to serve those enterprises located inside them.

The entire undertaking fits well with Israel's policy of separation - a policy that enables Israel to box in the Palestinians while maintaining control of their movements and economic viability.

As long as Israel controls access and resources in the West Bank and Gaza, the zones' operation will remain precarious, perpetually at the mercy of positive relations between Israel and Palestine. The water and electricity capacity of these zones will be totally controlled by Israel. Most important, Israel will maintain full control of the movement of goods and people between the zones and the outside world. By incorporating Israel's infrastructure of control into the plans, these projects would serve to normalize an illegal occupation as long as the state of occupation persists, and continue to do so even after it has nominally ended, not to mention undermine Palestinian political aspirations.

The privileged status of the zones also raises ethical concerns. While Israeli restrictions will be eased in order to ensure smooth functioning for foreign investors, indigenous industries outside the zones will continue to face the same hurdles that have hindered Palestinian industry for decades. Thus, existing businesses will be placed at a comparative disadvantage.

Donor funds, foreign direct investments and Palestinian efforts would be better placed if they targeted Palestine's natural economic comparative advantages - for example, tourism and agriculture - without trying to confine their activities to closed zones that will, over time, empty large tracts of land of their productive capacity, not to mention create a dependency on Israeli goodwill to allow these closed zones to function properly.

Similarly, confiscating agricultural land to make way for large industrial projects not only strips farmers of their livelihoods, but structurally reorients a key segment of the labor force that, over time, will lose its skills. Agricultural development in Palestine is not in need of a "zone," but rather requires Israeli compliance with international law, to release Palestinian water resources, and remove the myriad of access and movement restrictions that do not allow people or products to travel freely within Palestine and abroad.

Building high-tech zones in the vicinity of university campuses would be a more appropriate starting point. Better yet, bringing such investments into the universities themselves, which are in dire need of modernization and sustainable development, would have a more lasting impact and be a better deterrent of political turmoil.

While they might benefit a certain elite, the planned economic zones cannot benefit Palestinian strategic interests. The notion that political differences can be solved through job creation is fundamentally flawed and will not change the reality that our economy is micromanaged by a foreign military. The development projects proposed by the international community would only normalize the illegal occupation, by working in partnership with Israel to fine-tune its mechanisms of control.

Sam Bahour is a Palestinian business management consultant living in Ramallah and blogs at www.epalestine.com.

Tuesday, November 23, 2010

WASHINGTON, Nov. 22, 2010 /PRNewswire-USNewswire/ -- Today the Internal Revenue Service received a 1,389 page filing demanding that the American Israel Public Affairs Committee's (AIPAC's) tax exempt status be retroactively revoked. The filing, submitted by the IRmep Center for Policy and Law Enforcement, spans nearly 60 years, from the moment AIPAC's founder left the employment of the Israeli Ministry of Foreign Affairs to the present.

Two core charges are:

1. False Charitable Purpose. AIPAC has been investigated several times by the FBI and is currently in a civil suit over the ongoing acquisition and movement of U.S. government classified information. The filing argues that such activities reveal AIPAC does not function as a bona fide "social welfare" organization.

2. Fraudulent Application for Tax Exempt Status. AIPAC's original application for tax exempt status contains fraudulent representations and omissions. It fails to mention that AIPAC's parent organization, the American Zionist Council (AZC) was shut down by a U.S. Department of Justice Foreign Agents Registration Act order in 1962. AIPAC incorporated six weeks later and applied for tax exempt status, but failed to reveal that the majority of its startup funding came from Israel, funneled through the AZC.

Members of the public, state charity watchdogs and the law enforcement community may download and review the complaint summary at: http://www.IRmep.org/IRSAIPAC.pdf . For a DVD of the full IRS complaint and appendix, send an email and official surface mail address to info@irmep.org .

IRmep director Grant F. Smith and callers grilled IRS Commissioner Douglas Shulman on National Public Radio January 1, 2010 over lax IRS enforcement toward some Israel-related nonprofits committing illegal acts overseas and violating U.S. tax laws. Shulman assured America that, "If a charity is breaking the tax law, is engaged in activities that they are not supposed to be engaged in, we certainly will go after them. Every year we pull 501(c)(3) charity status from a number of charities. We've got thousands of audits going on regarding charities, and so we don't hesitate to administer the tax laws and make sure that people are following the rules."

According to Smith, "By publicly filing this 13909 complaint with the IRS, we encourage concerned Americans and misled donors to monitor whether the IRS takes appropriate action. The clock is ticking."

The Center for Policy and Law Enforcement is a unit of the Institute for Research: Middle Eastern Policy in Washington.

Saturday, November 20, 2010

(Sam Bahour is a Palestinian business management consultant living in Ramallah. This essay was made possible with partial support from the Rosa Luxemburg Foundation.)

When a project mixes the feel-good words of jobs, economic development and Israeli- Palestinian cooperation, how can anyone complain? These things are some of what the international community has been promising to deliver through the construction of industrial free trade zones in the Occupied Palestinian Territories. The free trade zone model has been promoted locally and globally by powerful third parties like the United States, France, Germany, Turkey and Japan for two decades, but none has much to show for the enormous efforts and amounts of money spent to bring these zones to life. Nonetheless, the project’s proponents expect the zones to constitute the economic foundation for a future Palestinian state. They hope that, by bolstering Palestine’s economy, the zones will make Palestinians less prone to social upheaval, less insistent on their national rights and more amenable to the status quo. The idea is that a peace agreement with Israel will ensue.

While this expectation is unlikely to be realized -- at least not in the way that the projects’ advocates anticipate -- these mega-employment projects present a serious challenge to those who strive to build an independent and viable economic foundation for a future Palestinian state. Because the zones will depend on Israeli cooperation to function, and because they will exist within an Israeli-designed economic system that ensures Palestinian dependence on Israel, they cannot form the basis of a sovereign economy. Relying on them will perpetuate the status quo of dependency.

Precedents

The industrial zones currently under construction in the West Bank are: the al-Jalama zone, in the north near Jenin, led by Germany with the support of Turkey; the Bethlehem zone led by France and the Jericho Agricultural Park (the so-called Valley of Peace) in the Jordan Valley, led by Japan; the Tarqoumiyya Industrial Estate, in the south near Hebron, spearheaded by the World Bank and Turkey. In Gaza, the Erez Industrial Zone along the Gaza-Israel border was abandoned by Israel and is no longer operational. The Gaza Industrial Estate (which Israel calls the Karni Industrial Zone), a Palestinian-developed zone southeast of Gaza City, came to a standstill in 2007, when Israel heavily restricted the passageways into and out of Gaza. South Korea and India are also entertaining the idea of sponsoring a techno-park, [1] which may house more high-tech business, but this notion is the least developed of them all.

The longest-operating border zone is the Erez Industrial Zone located at the northern tip of the Gaza Strip. It was estimated by the Israeli Ministry of Foreign Affairs to employ 20,000 Palestinians, but it never came close to employing a quarter of that number and in 2004, the Israeli minister of defense made a decision to withdraw Israeli firms located in the zone for security reasons. The area became a no-man’s land. The Jerusalem Post reported on January 2, 2006 that Turkish Foreign Minister Abdullah Gül visited Israel to sign agreements with Israel and the Palestinian Authority (PA) governing Turkey’s role in reviving the Erez industrial area. One Israeli official described the project as “the baby” of Turkish Prime Minister Recep Tayyip Erdoan. But following Hamas’ takeover of Gaza in 2007, Turkey froze the project and the zone remains empty.

There is also a long-standing industrial area in the West Bank called Atarot, north of Jerusalem along the main road to Ramallah that, today, is split down the middle by Israel’s separation wall. The Atarot Industrial Area is fully operated by Israel and mostly hosts Israeli companies. Atarot sits on the western side of the separation wall, which makes it accessible to Palestinians from the West Bank only by way of a permit from the Israeli military.

At best, most of these industrial zones promise menial labor-intensive jobs to Palestinians who are extremely reliant on donor funds to maintain their livelihoods. The industrial zone project constitutes a shift from the current internationally funded welfare-like system, characterized by an inflated public sector and heavy subsistence handouts, to a system that is similarly based on foreign funding, but instead requires Palestinians to sell their labor for the benefit of those commercial entities established in the industrial zones, which will depend on Israeli good will to succeed. A closer look at how the zones are being developed, who is expected to profit from them and how they are connected to the global economy is telling.

Development for Peace

France is behind the creation of the Bethlehem Multidisciplinary Industrial Park, for which the PA issued title to 500 dunams (125 acres) of public property. French President Nicolas Sarkozy handpicked Valerie Hoffenberg, Paris director of the American Jewish Committee (a group that advocates for Israel), to be his “special envoy to the Middle East” for this purpose. It has been her job to oversee the project’s rollout.

In a report published in the Israeli daily Ha’aretz on May 27, 2010, in which Hoffenberg was interviewed at length, she told the story of how the industrial free zone project was born at a dinner she attended with Sarkozy and Israeli President Shimon Peres in 2008. According to Hoffenberg, the project was informed by a belief, shared by Peres and Sarkozy, that a viable Palestinian economy would encourage the peace process. Hoffenberg, who works out of the French Foreign Ministry building, describes her work as “a new form of diplomacy.” Before the industrial park’s inauguration, Hoffenberg arranged a meeting between French and Israeli businessmen in an effort to bring them into the project. “I recruited 36 companies, including CEOs of the most important companies, such as France Telecom, Schneider Electric, Publicis, Renault, Sephora, JCDecaux -- the whole ‘A-Team,’” Hoffenberg boasted.

Another nascent enterprise is the German-Turkish industrial zone in al-Jalama, outside the Palestinian city of Jenin, a traditional agricultural area. The project is run by the PA, Israel and the Shamal Company. Bisan for Research and Development, a Palestinian NGO which has organized extensively around the industrial zone phenomenon, notes that the project has faced opposition from farmers in the Jezreel Valley, one of the most fertile areas in Jenin, and may fall apart as a result. The farmers have been refusing to sell their land, partly because it is unclear what kinds of factories will be built and partly because agricultural land has already been confiscated by Israel for construction of its separation wall.

The al-Jalama project has received scant media attention, but nevertheless, it is the one, along with the Bethlehem project, that is proceeding the fastest. The planning process for the zone started long before the intifada that began in the fall of 2000. Germany’s leading development bank, KfW Entwicklungsbank, was commissioned to conduct a rather expensive feasibility study and, as a result, Germany committed 10 million euros to fund the infrastructure of the zone. But when Israel launched a major military redeployment in all Palestinian cities in 2000, the project was put on hold and Jenin’s infrastructure was destroyed. When the project was revisited in 2005, KfW was commissioned to update the feasibility study and Turkey was recruited to take part in the project. Supposedly, the Turkish side will acquire 75 percent and the Palestinian side 25 percent of the joint venture. It is unclear, however, if and how the diplomatic crisis between Israel and Turkey following Israel’s assault on the Mavi Marmara aid ship will affect the project.

The US has mobilized to support all of these efforts through various means, most visible among them being support for reforms within the PA in Ramallah. This support is most apparent in PA Prime Minister Salam Fayyad’s second-year program of the thirteenth government titled, “Homestretch to Freedom: Palestine: Ending the Occupation, Establishing the State.” The program, which includes measures for reform in various aspects of government and economics, calls for, among other things, the development of industrial infrastructure by completing infrastructure works at industrial estates in Jenin, Bethlehem and Jericho and establishing three specialized industrial compounds, including for information technology, precious metals, renewable energy and leather industries. This program has received rave reviews from the US government and serves as a framework for the continued injection of donor funds.

Despite international enthusiasm at what is ostensibly a novel solution to the Israeli- Palestinian conflict, the notion that bringing economic development to the Palestinians will promote peace has its roots in Israeli policy from the beginning of the occupation. After Israel took control of the West Bank and Gaza from Jordan and Egypt in 1967, living standards in the Occupied Territories soared. While this growth was largely attributable to remittances from Palestinian workers in the Gulf and across the Green Line, which divides Israel from the West Bank and Gaza, Israel invested in vocational training and agricultural development on a scale that had not been seen under Jordanian and Egyptian suzerainty. [2] Despite these efforts, and because of continued Israeli military rule and the repression of Palestinian national aspirations, a grassroots uprising spread throughout the Occupied Territories in 1987, and continued up until the signing of the Oslo accords in 1993. Thus it was a political solution, and not an economic one, that ultimately brought peace.

The notion that business links will foster peace because the economic returns of cooperation will outweigh the benefits of resistance can only hold if both sides stand to benefit equally from collaboration. For the Palestinians, the benefit is hoped to be economic. For the Israelis, the project is expected to promote a more quiescent opponent; but should the endeavor fail, it is unlikely to exact a heavy economic toll upon Israel. If the industrial zones are to form the basis of the Palestinian economy, the Palestinians, on the other hand, will feel economic pressure to bend to Israel’s will. The project therefore assumes that the Palestinians are the spoilers of the peace process, and that if they can be persuaded to cooperate, a peace deal will be forthcoming. It does not leave room for the possibility that the status quo -- separation -- is indeed a viable option for Israel. Thus, rather than promoting a final settlement, this industrial zones project risks further entrenching Israel’s occupation.

Legal Status

Under the leadership of the late President Yasser Arafat, the PA enacted Law 10 of 1998 regarding industrial estates and industrial free zones. This law established a Palestinian Industrial Estate and Free Zone Authority (PIEFZA), which was to be the “one-stop shop for investors.” The PIEFZA board of directors consists of 11 members: seven PA ministers, two representatives of commercial developers and two representatives of chambers of commerce and industry and industrial federations. The industrial estates law states that PIEFZA shall be responsible for implementing policies pertinent to establishing and developing industrial estates and free zones in Palestine and issuing certificates to investors. Article 39 states that: “Local goods and products supplied to the industrial free zone from any Palestinian territories shall not be subject to any established procedures, taxes or duties.” This exclusion has become a major concern for the local community given the rumor that Palestinian labor laws will not apply to workers who are employed in these zones. Likewise, Article 40 of the law stipulates: “All goods and products manufactured in the industrial free zones and exported abroad shall not be subject to the rules and legal procedures established for export, export taxes and any other taxes.”

A detailed search of the PIEFZA website reveals no information regarding the policies for establishing and developing zones. A written request for more information submitted to PIEFZA’s director general went unanswered. In addition, and puzzlingly, the investor’s application listed on PIEFZA’s website directs applicants to fax completed applications to a Gaza office, which presumably is now staffed by someone from Hamas’ government. That the process is so lacking in transparency is a poor reflection on the status of Palestinian institutional reforms. What good is investment in public institution building if these mega- employment centers are excluded from the systems being established?

Legal acrobatics aside, questions like who is importing materials into these zones and who is receiving the exports must be analyzed in much greater detail. Following the money trail will most likely lead to the same few Palestinians who have financially benefited from the Oslo process. One clear indication is the rush by specific economic entities and persons buying land in the vicinity of these planned zones. With the majority of Palestinian lands not formally registered with the Palestinian Land Authority, it would be impossible to understand who actually holds ownership of these lands.

Who Profits?

The working assumption is that these zones will be open for business to any Palestinian or international company wanting to establish a factory within them. Although the sectorial theme of each zone is unclear, if existing zones (such as the maquiladoras in Mexico or those in Jamaica) are any indication, the zones in Palestine will host “dirty” businesses -- those that are pollution-prone and sweatshop-oriented. Jordan’s Qualified Industrial Zones (QIZs) provide a regional example. The Jordanian QIZs were envisaged as forming the basis of regional economic cooperation after Jordan and Israel’s 1994 peace treaty. To provide incentives for cooperation, products produced in the QIZs fall under the US-Israel Free Trade Agreement as long as they have a minimum 8 percent contribution from Israel. A similar setup can be expected for Palestinian zones, especially given the US desire to promote a Middle East Free Trade Area. While the Jordanian QIZs have generated 36,000 jobs, 75 percent of these have gone to foreign, mostly Asian, workers. [3] Given that the objective of the Palestinian zones is job creation, it can be expected that these zones would indeed employ Palestinian workers, but their special status raises questions about the working conditions that might dominate within them. The Jordanian QIZs, like many others around the world, are notorious for their exploitative labor practices.

According to two consultants to the Israeli government, the West Bank zones are expected to employ 150,000-200,000 Palestinians, nearly the same number that used to travel daily to Israel for work before the second intifada. [4] Studies from the Peres Peace Center project even higher numbers, estimating that 500,000 Palestinian workers will be employed in joint industrial zones by 2025. Israeli expectations do not stop there. The consultants also predicted that 30 percent of Palestinian businesses outside the zones will refocus their businesses to serve those enterprises located inside the zones.

In a nutshell, one can see a continuation of Israel’s scheme to reengineer the Palestinian economy away from its agricultural and tourism bases toward an economy that is dependent on Israeli public services and good will. This process has been unfolding since the start of Israel’s occupation in 1967. When the Israeli military took control of the West Bank and Gaza, it altered Palestinian agriculture by controlling the types of crops that could be planted to prevent competition with Israeli produce, seizing land to reduce the agricultural sector and taxing Palestinian exports while allowing Israeli products to enter the territories duty-free. The requirement that all industries obtain an Israeli license limited industrial development, as did higher taxes on Palestinian industries than on their Israeli counterparts. As a result, industries that developed tended to be those that provided Israeli industry with labor-intensive, low-cost products. Palestinian industry, agriculture and labor were therefore developed to suit the needs of Israel’s economy. [5] After the second intifada, when Palestinian workers were barred from traveling to Israel, many returned to the theretofore neglected agricultural sector for work. [6] Today, this economic reengineering effort in the West Bank can be viewed as an attempt to relocate the scores of Israeli settlement enterprises, which depend on Palestinian cheap labor, to these newly created “Palestinian” zones, thus “legalizing” their existence.

The project fits well with Israel’s policy of separation -- a policy that enables Israel to box in the Palestinians while maintaining control of their movements and economic viability. Separation has been implemented gradually since the 1993 Oslo accords, after which Israel tightened its border with the West Bank and Gaza but continued to employ Palestinians in menial jobs within Israel. Closures were used as a form of collective punishment to cut off Palestinians from their jobs across the Green Line. After the second intifada broke out, Israel further tightened its border with the Occupied Territories. Later, Israel built the separation wall physically to divide Palestinian and Israeli populations, but Palestinian governing institutions, industry and freedom of movement continue to depend on Israel, which controls the borders surrounding the Occupied Territories and collects taxes for the PA. Foreigners replaced the Palestinian laborers who previously worked menial jobs in Israel. Foreign workers, however, have proved to be an unsatisfactory solution for Israel, given its overriding prerogative to maintain the Jewish character of the state, as these non-Jewish workers are now attempting to settle permanently. [7] The QIZ scheme would reduce Israel’s dependence on foreign workers by bringing the factories to Palestinian workers now that they are prohibited from traveling to the factories.

Movement and Access

As long as Israel controls access and resources in the West Bank, the zones’ operation will remain precarious, perpetually at the mercy of positive relations between Israel and Palestine. Given the existing infrastructure of the West Bank, the water and electricity capacity of these zones will be totally controlled by Israel. Most importantly, Israel will maintain full control of the movement of goods and people between the zones and the outside world. By incorporating Israel’s infrastructure of control within the plans, these projects serve to normalize an illegal occupation and undermine Palestinian political aspirations.

When former Secretary of State Condoleezza Rice flew from Washington to Tel Aviv in 2005 to strike a deal with Israel on Palestinian movement and access, it was clear that the US understood that without freedom of movement the Palestinian economy does not stand a chance, even if the economic framework being promoted has nothing to do with Palestinian economic independence. Although it signed the agreement, Israel refused to implement its terms, and the US failure to confront Israel means that the conditions necessary for Palestinian economic sustainability have not been met.

The World Bank acknowledges as much when it states repeatedly in its reports that, even while proclaiming 8 percent economic growth, the “critical private sector investment needed to drive sustainable growth remains hampered by restrictions on movement of people and goods.” It is clear that economic growth is not necessarily equivalent to economic development, especially in a politically charged, donor-driven environment like the Occupied Territories under the quasi-rule of the PA.

The privileged status of the zones also raises ethical concerns. While Israeli restrictions will be eased in order to ensure smooth functioning for foreign investors, indigenous industries will continue to face the same hurdles that have hindered Palestinian industry for decades. Thus, existing businesses will be placed at a comparative disadvantage.

What Needs to Happen?

Donor funds and Palestinian efforts would be better placed if such investments targeted Palestine’s natural economic comparative advantages, for example, tourism and agriculture, without trying to confine their activities to closed zones that will, over time, empty large tracts of land of their productive capacity, not to mention create structural dependency on Israeli good will to allow these closed zones to function properly. In a land that is home to the Church of the Nativity, Church of the Holy Sepulcher, Dome of the Rock and dozens or other historic attractions, it makes sense to preserve and develop these existing assets, which have the potential to serve as a pillar of a future state economy.

Converting the industries in the Atarot industrial zone into something more complementary to the historic city of Jerusalem, for example, could serve to underpin Palestine’s tourism sector as well as preserve the sanctity of the greater Jerusalem vicinity. Rather than building new industrial zones, Palestinian interests would be better served if the Atarot zone were returned to Palestinian control. Adjacent to the Atarot complex is the idle Qalandiya airport. The airport, which operated prior to Israel’s occupation in 1967, would be a crucial component in efforts to build Palestine’s tourism sector.

Similarly, confiscating agricultural land to make way for large industrial projects not only strips farmers of their livelihoods, but structurally adjusts a key segment of the labor force that, over time, will lose its skills. Agricultural development in Palestine is not in need of a “zone,” but rather requires Israel to comply with international law, to release Palestinian water resources and remove the myriad of access and movement restrictions that do not allow people or products to travel freely within Palestine and abroad. Trying to concentrate agricultural growth in a limited “zone” merely opens the door for farmers outside of the zone to become economically disenfranchised by public policy, instead of being equally supported regardless of their physical location.

Singing the song of massive job creation in industrial zones without analyzing all of the ramifications could be detrimental to Palestine’s economic and political future. Placing such zones of economic activity closer to population centers and rehabilitating existing near-city industrial areas makes more sense today given the volatile political situation and the need to upgrade existing in-city and near-city zones, many of which pose health and environmental risks to their surrounding communities. Building high-tech zones in the vicinity of university campuses would be a strategic starting point. Better yet, bringing such investments into the universities themselves, which are in dire need of modernization and sustainable development, would have a more lasting impact and be a better deterrent of political turmoil.

While they might benefit a certain elite, the planned economic zones cannot benefit Palestinian strategic interests. The notion that political differences can be solved through job creation is fundamentally flawed and will not change the reality: 60 percent of Palestinians are internally displaced or dwell in refugee camps just hours from their homes and properties; 1.5 million Palestinians in Gaza survive under siege conditions; hundreds of thousands have been illegally detained by Israel; and the economy is micro-managed by a foreign military. The development projects proposed by the international community only normalize the illegal occupation, by working in partnership with Israel to fine-tune its mechanisms of control.

Tuesday, November 16, 2010

In response to President Barack Obama’s criticism of Israel’s most recently announced building plans in East Jerusalem, Prime Minister Benjamin Netanyahu’s spokesman made the following statements on behalf of the Prime Minister: “Jerusalem is not a settlement.” “Jerusalem is the capital of the State of Israel.” “Israel never agreed to limit its construction in any way in Jerusalem.” “Israel sees no connection at all between the peace process and building plans in Jerusalem.”

Most, if not all, of these views have since been repeated by Netanyahu himself.

Each of these statements is untrue and/or irrelevant. President Obama did not object to construction in Jerusalem, but in East Jerusalem. West Jerusalem is the internationally recognized capital of Israel; East Jerusalem, which was unilaterally annexed by Israel’s government in 1980, is not. Indeed, there is not a single foreign embassy even in West Jerusalem, so complete has been the international rejection of Israel’s unilateral annexation of East Jerusalem, an annexation that not a single previous U.S. administration has recognized.

As the “office” of Prime Minister Netanyahu knows very well, it is not “settlements” per se that are illegal. It is the transfer of an occupier’s population into the occupied territories that violates the Fourth Geneva Convention, to which Israel is a signatory. Such transfers are illegal irrespective of where they take place­—whether in settlements in the West Bank countryside or in apartment buildings in East Jerusalem. It was not only the International Court of Justice that confirmed the illegality of Israeli construction beyond the pre-1967 border, but Israel’s legal advisor to its Ministry of Foreign Affairs, Theodore Meron, who informed his own government in 1967, shortly after the Six-Day War, that “civilian settlement in the administered territories contravenes explicit provisions of the Fourth Geneva Convention.” East Jerusalem is indisputably beyond the 1967 border, and that is why the transfer of Israel’s population there is illegal. While it is true that “Israel never agreed to limit its construction in any way in Jerusalem,” it is irrelevant. Israel signed the Road Map for Middle East peace, which stipulates that the Government of Israel “immediately dismantles settlement outposts erected since March 2001” and “Consistent with the Mitchell Report...freezes all settlement activity (including natural growth of settlements).” Neither the Road Map nor the Mitchell Report makes a distinction between construction in East Jerusalem and in settlements.

The most egregiously dishonest of Netanyahu’s statements is that there is no connection between construction in Jerusalem and the peace process. Former–Prime Minister of Israel Ehud Olmert, a former “Likud prince” and head of Kadima, said that an Israeli leader who refuses to share Jerusalem with the Palestinians and maintains he is serious about seeking a peace agreement is lying.

That said, it really should not come as a great surprise to President Obama that Netanyahu seems to believe it is Israel’s prime minister, not the White House occupant, who determines U.S.–Middle East peace policy. In the wake of President Obama’s recent proposal to lavish a stunning cornucopia of gifts on Prime Minister Benjamin Netanyahu—giving away Palestinian rights that were not his to give—reportedly in return for nothing more than Netanyahu’s agreement to talk to President Mahmoud Abbas for another two months (which Netanyahu, in turn, disdainfully rejected because he thought he could obtain even more), it is not an unreasonable conclusion.

How else to understand what Vice President Joe Biden told Netanyahu on November 8 in New Orleans before a gathering of Jewish Federation officials that differences between Israel and the United States on the subject of construction in Jerusalem and in the West Bank are nothing more than “tactical in nature.” Is the continuation of Israel’s military occupation and its denial of all rights to millions of Palestinians for nearly half a century nothing more than a minor tactical issue for the United States? Is that what President Obama told the Arab and Muslim world in his speech in Cairo?

President Obama will have to take his own words about the Middle East peace process and its deep moral and strategic implications for America more seriously than he has so far if he expects Bibi Netanyahu to do so as well.

Sam Bahour - Photo

About Me

Sam Bahour is a Palestinian-American based in Al-Bireh/Ramallah, Palestine and is managing partner of Applied Information Management (AIM), which specializes in business development with a niche focus on start-ups and providing executive counsel.
Bahour was instrumental in the establishment of two publicly traded firms: the Palestine Telecommunications Company (PALTEL) and the Arab Palestinian Shopping Center. He is currently an independent director at the Arab Islamic Bank, advisory board member of the Open Society Foundations’ Arab Regional Office, and completed a full term as a Board of Trustees member and treasurer at Birzeit University. In addition to his presidential appointment to serve as a general assembly member of the Palestine Investment Fund, Palestine’s $1B sovereign wealth fund, Bahour serves in various capacities in several community organizations, including co-founder and chairman of Americans for a Vibrant Palestinian Economy, board member of Just Vision in New York, board member and policy adviser at Al-Shabaka, the Palestinian Policy Network, and secretariat member of the Palestine Strategy Group.